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The World Economic Forum hits Latin America, the most unequal region in the world

This year the World Economic Forum (or WEF) for the Latin America region was held in Panama. A country where growth levels, which are among the 20 highest in the world, have gone hand in hand with an increase in inequality over the last 4 years – running counter to the rest of the region that has seen inequality decrease. Where tax-rates are among the lowest on the continent and where a multitude of amenities are offered up to those who deposit capital in the country (despite the government recently attempting to better its image by signing up to a host of information exchange agreements). Where the capture of public policy by the economic elites can be exemplified, to give just one example, by the current president. A man who owns numerous companies in the food industry, including supermarket chains, as well as a panoply of media outlets.

And where the gap which separates the wealthy from the marginalized population is so big that I was actually told: “In Panama, there are no poor people.”

A widening gap

This is exactly what I went to the WEF to denounce, with the presentation of our report Kingdom of the Elites. The report decries the staggeringly high levels of inequality in Latin America (despite a reduction over the past ten years, it remains the most unequal region in the world); the phenomenon of democratic capture by a handful of multi-millionaires; and the risks which are born out of these extremely high concentrations of wealth and power – which we know weaken the social contract, erode trust in public institutions, put the brakes on poverty reduction and, undoubtedly, spur violence.

As one of the participants in the forum said: “In Latin America we have the most unequal and the most violent cities in the world.” This is no accident.

The rich rule

In Latin America, the rich rule. 113 Latin-Americans appear on the world’s billionaires list, while 164 million men and women in the region live in poverty (66 million of them in extreme poverty). The region is home to the second richest man in the world, Mexican telecommunications tycoon Carlos Slim, who is far and above the wealthiest man in the region. His annual earnings alone could pay the salaries of 440,000 Mexicans. But, of course, he would not do that.

In the region we see how economic inequalities and other dimensions of inequality such as gender and race, feed off each other making social mobility a mere illusion. Meaning that in the end everything comes down to where you were born and who your parents are. For one of the 164 million people living in poverty in the region to one day participate in the WEF in Latin America it would have to be a statistical accident.

Wealth and power

Changing the dynamics of wealth and power in Latin America – and the rest of world – is no easy task. But this is not impossible. This is one lesson history has taught us. Today – at last – we can see that the terms of the debate on poverty and inequality at the global level are changing and this is creating a new political momentum. The citizens of Latin America and the world are expressing their growing sense of injustice in the face of the capture of wealth by the few, which is with each day more obvious, if not ostentatious, while the benefits of growth are not reaching the majority – while the cost of the economic crisis does fall on their shoulders.

Inequality stymies development

Political leaders also recognize that growing inequality has become a threat to their plans for economic and social development. The UNDP recently conducted a survey with political leaders around the world which confirmed that there is consensus among politicians on the need to develop public policy to reduce inequality.

Yet conversely there was also wide acknowledgement that the political space for policy reform is limited. This is no accident. It confirms Oxfam’s position in Working for the Few, it’s the rich who rule.

What we can do

The WEF was a microcosm of this reality and has left me questioning what we can do to contribute to the widening of political space? The defence of democratic space – which is under serious threat in many countries – again becomes a central issue.

The voices of everyday citizens need to be strengthened, and informed, so that they can play a leading and effective role in shaping and controlling the policies that affect all of our lives. The attitudes and beliefs that legitimate and nurture inequalities have to be transformed – this includes those of citizens in the region, as well as those of political representatives and business leaders - like those who attended the LAC WEF.

On the final night of the WEF, there was an earthquake in Chile and the tsunami alert extended right up the coastline to Panama. A message was immediately communicated to the participants of the Forum, reassuring us that our security was guaranteed: “Here in Playa Bonita there are full, actionable measures in place.” By contrast, I hear that in Chile the marginalized populations who were affected by the earthquake that struck in 2010 are still waiting for the promised and long-overdue reconstruction of their homes. It’s no accident.